If you’re registered for GST, lodging your BAS (business activity statement) is a fundamental reality of doing business in Australia. Lodging your BAS is a cornerstone of remaining compliant with the Australian Taxation Office (ATO).
So, how does this work in reality? Should you do your own BAS or enlist a BAS agent? Let’s compare a couple of real-world scenarios so you can understand your options and how it really works.
Firstly, what exactly is BAS?
When you’re registered for GST and have an ABN, you must report and pay your GST and other taxes to the ATO by lodging a BAS statement.
Your BAS will help you report and pay your:
- GST
- PAYG instalments
- PAYG withholding tax
- other taxes
When do you need to be registered for GST?
You must register for GST if:
- Your business has a GST turnover (gross income minus GST) of $75,000 or more per financial year.
- Your non-profit organisation has a GST turnover of $150,000 or more per financial year.
- If you’re a taxi driver or ride-sharing driver, no matter what your turnover is.
When do you need to process BAS?
Your GST reporting and payment cycle will generally be one of the following.
- Quarterly – if your GST turnover is under $20 million
- Monthly – if your GST turnover is over $20 million
- Annually – if you are voluntarily registered for GST and your GST turnover is under $75,000 ($150,000 for not-for-profit bodies).
Scenario 1: Arnie the Uber driver
Arnie drives Ubers as a sole trader and has decided he wants to do his own BAS.
Let’s see how that works.
Arnie’s situation
Arnie is an uber driver and generally only earns around $30,000 per year. Even though Arnie is below the $75,000 GST threshold, he still needs to be registered for GST as he’s a ride-share driver—the exception to the general threshold rule.
Arnie is a Dad who studies on the side and works to his own schedule. This means that he has just enough spare time to do his own accounting and admin.
Furthermore, he’s pretty good with software and should have no problems doing his own BAS, which is much easier than it sounds.
Since Arnie can easily lodge BAS by himself with the help of his accounting software and doesn’t earn a lot of money, he doesn’t necessarily need to hire a BAS agent. Many small businesses find doing their own BAS a breeze.
Arnie will be processing BAS online by himself
As a sole trader, Arnie will be doing his BAS quarterly using his accounting software and the ATO’s online form. As a sole trader, Arnie can choose to do this through MyGov (available for individuals), or the ATO’s online portal (which is available for all businesses). Both are popular and easy options.
The ATO will notify Arnie when his quarterly BAS is due, and he simply needs to log in to his accounting software and process a BAS report. The report will give him all the information he needs to fill out the online BAS form. Once he’s filled the online form and submitted it, that’s it, he’s done until the next quarter!
Scenario 2: Lily the Café owner
Lily owns a café and has decided she wants to use a BAS agent to help her.
Let’s see how that works.
Lily’s situation
Lily is a busy café owner and has an annual turnover of more than $250,000 – well over the GST threshold. This means that Lily is registered for GST and will need to regularly lodge her BAS.
Lily has decided that her busy life running a successful café and managing staff is already hectic enough. With a young child at home, she is always looking to cut back on as much business administration as possible. As an employer of several staff, she also has a lot of PAYG responsibilities making things a bit more complex.
To help her out, Lily decided to nominate a professional to manage her BAS responsibilities on her behalf. After doing some research, she discovered a local BAS agent, Yasmin, and decided to hire her.
Lily has appointed Yasmin, a BAS agent to process BAS for her
By appointing Yasmin as her BAS agent, Lily has essentially authorised her to represent her to the ATO.
She’ll have access to Lily’s ATO alerts and messages and will be able to lodge her BAS statement on her behalf, freeing Lily up to manage run her café and spend more time with her family.
On top of that, as a registered BAS agent, Yasmin can also handle Lily’s PAYG and income taxes, further reducing the time she spends on accounting and bookkeeping.
